New Deal Summary

 By the early 1930s America was in the depths of the worst economic downturn in U.S. history – the Great Depression. The stock market crash of October 1929 signaled the beginning of the Great Depression. Consumer spending declined nationwide, causing huge reductions in industrial production. As production decreased, failing companies were forced to lay off workers. By 1933, 15 million Americans – 25% percent of the workforce – were unemployed and nearly half the country’s banks had failed. To make matters worse, the Great Plains was struck with a severe drought leading to devastating dust storms known as the Dust Bowl.President Herbert Hoover believed the economy would improve with little or no help from the government. Once Hooverrealized that government intervention was needed, his actions were too little, too late. Many blamed Hoover for America’s troubles. As the presidential election of 1932 approached, many Americans were eager to elect a new president. As a result, Franklin Delano Roosevelt was elected as the 32nd president of the United States. Roosevelt vowed to act swiftly to end the crisis and promised “a new deal for the American people.”The term “New Deal” was used to refer to Roosevelt’s programs that were designed to lift the United States out of the Great Depression. The New Deal was a series of government programs and projects established to stabilize the economy, provide jobs and relief to those who were suffering, and restore prosperity to the nation. Congress approved most of the New Deal programs Roosevelt wanted. The programs were paid for with federal taxes on incomes and businesses. Numerous programs were created, but they can generally be grouped in the following five categories: federal work programs, environmental improvement programs, farm assistance programs, Social Security, and increased rights for labor.Federal work programs were created with the intention of getting unemployed Americans back to work. The Works Progress Administration, or WPA, was a federal work program that hired American workers to build schools, libraries, airports, post offices, bridges, and highways. The Tennessee Valley Authority, or TVA, was another program that put thousands of Americans to work. The TVA built hydroelectric dams to provide electricity for rural areas.The most popular environmental improvement program was the Civilian Conservation Corps, or CCC. The CCC provided thousands of conservation jobs to unemployed young men during the Great Depression. They worked to protect, or improve the environment through federally funded jobs on government lands. By 1942, the CCC had improved hundreds of state and national parks, and planted over 17 million trees.Farm assistance programs aimed to aid struggling farmers. The Agricultural Adjustment Administration, or AAA, was designed to help farmers by increasing the price of farm products so that farmers could make a profit. Overproduction had caused the price of farm goods to drop. The AAA developed a plan to pay farmers to leave some of their land unplanted in an attempt to eliminate crop surpluses. The program helped to bring the price of many crops back to a level that gave farmers a reasonable profit.Social Security was established by the passing of the Social Security Act in 1935. The Social Security system is essentially a government-run insurance program that helps to protect vulnerable American citizens. The act requires workers and businesses to pay taxes to the Social Security trust fund. The fund provides monthly checks to workers once they reach retirement age. It also gives payments to disabled workers, or spouses and children when a worker becomes disabled or dies. The Social Security system still exists in America today.Another major feature of the New Deal was increased rights for labor (workers). President Roosevelt pushed for new laws to protect American workers. Congress passed the National Labor Relations Act in 1935, which guaranteed workers the right to form labor unions. The Fair Labor Standards Act mandated a 40-hour work week with overtime pay, set an hourly minimum wage, and restricted child labor.The banking industry was also affected by the New Deal. The Federal Deposit Insurance Corporation, or FDIC, was set up to ensure Americans did not lose their bank deposits or savings accounts if a bank closed. The program guaranteed the federal government would pay-back deposits that were lost during a bank failure. The agency helped to promote public confidence in the banking industry.The New Deal expanded the role of the federal government in the nation’s economy and the lives of the American people. Once in place, the federal government took on an increased responsibility for the social welfare of its citizens. It began to regulate the stock market, reform the banking industry, and bring Americans relief through work programs and economic aid. Although the New Deal did a lot to help the American people and get the economy back on track, it did not end the Great Depression. America was only saved from the Great Depression by the beginning of World War II, and the industrial production it demanded.

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